The aim of this thesis is to investigate how knowledge arising from basic
research diffuses into the commercial sphere and impacts upon it. The
particular research area in question is Artificial Intelligence (AI), which until
recently was limited to academic research laboratories and was considered to
offer few possibilities for commercial exploitation. An empirical study is
described which investigated a group of thirty-eight UK-based firms who were
all promoting AI products and services to a market largely concerned either
with developing capabilities in AI programming techniques or, in seeing
demonstrations of the application of these techniques to specific,
commercially relevant tasks. At the time of the study none of the AI firms
had demonstrated any significant commercial success. .
The commercialization of AI by these firms is compared to accounts of the
innovation process given by Schumpeter, Freeman and Teece. These three
accounts are not mutually exclusive. Rather, they contribute to the organic
developme,nt of a 'Schumpeterian' account of the relationship between the
commercial application of basic research and economic change. However, the
analysis of the commercialization of AI in the UK suggests a more complex
picture than is currently provided by this 'Schumpeterian' perspective.
The AI firms were found to have been involved in a process of technology
transformation .' that is, they had transformed and .packagedgeneric AI
knowledge in order to make it possible for customers to acquire such
knowledge via the market place. This commodification process also
involved combining AI knowledge with industry-specific or applicationspecific
knowledge, which is not generally regarded as a product of basic
research, but is crucial to making AI solutions relevant to industrial
organizations. Although the AI firms were attempting to develop a variety of
market niches in which to sell their products and services, they all adopted a
common methodology for identifying customers and seeking to establish
collaborative relationships with them. It is this analysis of the transfer of
academic knowledge via the market place, and the consequent
transformation of both, that this thesis can add as a theoretical entity to the
debate around the development of new technology-based industries.